THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

CanWel Building Materials Group Ltd. ("CanWel" or the "Company") (TSX:CWX)(TSX:CWX.DB) announced today that it has closed its bought deal offering (the "Offering") of 9,091,000 common shares of the Company (the "Common Shares") at a price of $6.60 per Common Share (the "Offering Price") for gross proceeds of $60,000,600. The Offering was underwritten by a syndicate of underwriters led by GMP Securities L.P., and including Canaccord Genuity Corp., Raymond James Ltd., Haywood Securities Inc., Cormark Securities Inc. and Paradigm Capital Inc. (collectively, the "Underwriters"). The net proceeds of the Offering will be used to repay, in full, the Company's convertible debentures and to repay a portion of the borrowings under the Company's revolving loan facility, which may be redrawn, from time to time, to finance potential future acquisitions, working capital and for general corporate purposes.

The Underwriters have been granted an over-allotment option to purchase up to an additional 1,363,650 Common Shares at the Offering Price, exercisable in whole or in part, until thirty days from today, to cover over-allotments, if any, and for market stabilization purposes. If this option is exercised in full, an additional $9,000,690 will be raised pursuant to the Offering and the aggregate gross proceeds of the Offering will be $69,000,690.

The securities offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

The Company also announced today that it plans to redeem all of its outstanding convertible debentures (the "Debentures"). The Debentures, which have a maturity date of April 30, 2017, will be redeemed by the Company on or about September 30, 2016 (the "Redemption Date") in accordance with the terms of the Debenture trust indenture. The Debentures are listed on the Toronto Stock Exchange under the symbol "CWX.DB".

The aggregate principal amount of Debentures outstanding is $43,689,000. On the Redemption Date, the Company will pay the holders of the redeemed Debentures a redemption price equal to $1,000 for each $1,000 principal amount of Debentures and all accrued and unpaid interest up to but excluding the Redemption Date.

Formal notice of redemption has been delivered to the Debenture holders through the Debenture trustee, BNY Trust Company of Canada, in accordance with the trust indenture. Beneficial holders of the Debentures are encouraged to contact their investment dealer to coordinate the surrender of their Debentures or if they have any questions about the redemption.

About CanWel

Founded in 1989, CanWel is headquartered in Vancouver, British Columbia and trades on the Toronto Stock Exchange under the symbol CWX and is Canada's only fully integrated national distributor in the building materials and related products sector. CanWel operates multiple treating plant and planing facilities in Canada and the United States, and operates distribution centres coast to coast in all major cities and strategic locations across Canada and near San Francisco and Los Angeles, California. CanWel distributes a wide range of building materials, lumber and renovation products. In addition, through its Jemi Fibre division, CanWel operates a vertically-integrated forest products company based in Western Canada, operating from British Columbia to Saskatchewan, also servicing the US Pacific Northwest. CanWel owns approximately 136,000 acres of private timberlands, strategic Crown licenses and tenures, log harvesting and trucking operations, several post and pole peeling facilities and two pressure-treated specialty wood production plants.

Cautionary Statements

Certain statements in this press release, including but not limited to statements about the Company's dividend payment or policy and redemption of the Debentures, may constitute "forward-looking" statements. When used in this press release, such statements use words, including but not limited to, "may", "will", "expect", "believe", "plan", "intend", "anticipate", "future" and other similar terminology. These forward-looking statements reflect the current expectations of the Company's management regarding future events but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These factors would include, but are not limited to, dependence on market and economic conditions, sales and margin risk, competition, information system risks, availability of supply of products, risks associated with the introduction of new product lines, product design risk, environmental risks, volatility of commodity prices, inventory risks, customer and vendor risks, acquisition and integration risks, availability of credit, credit risks, interest rate risks, regulatory risks and employee retention risks. In addition, a number of assumptions were utilized or applied in making the forward-looking statements. Some of the key assumptions include, without limitation, assumptions regarding the performance of the Canadian or U.S. economy, interest rates, capital and loan availability, the Canadian or U.S. housing and building materials markets; the amount of the Company's cash flow from operations; tax laws; and the extent of the Company's future acquisitions and capital spending requirements or planning. There is a risk that some or all of these assumptions may prove to be incorrect. There are numerous risks associated with an investment in the Debentures or Common Shares, which are also further described in the "Risk Factors" sections of the Company's annual information form dated March 30, 2016 and final short form prospectus dated August 26, 2016, as well as its other public filings on SEDAR. These forward-looking statements speak only as of the date of this press release. We caution that the foregoing factors that may affect future results are not exhaustive. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by applicable securities laws, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise, except as required by applicable law.